Reshoring American Manufacturing in the Era of COVID-19
The United States' loss of manufacturing capability in the past decades has led to a decline in the nation's standard of living, and has also weakened its geopolitical strength. The COVID-19 outbreak has meanwhile underscored the vulnerabilities of extensive supply chains that include unreliable trading partners. Proven off-the-shelf methods and principles are however available to rebuild the United States' manufacturing capability and make it more profitable for all stakeholders.
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Why Should You Attend:
A decline in manufacturing capability has been a universal leading indicator of national decline. Supposedly dominant nations like Spain and Portugal (16th century) and the Polish-Lithuanian Commonwealth (16th-17th century) are prominent examples, and the United States superseded the British Empire in the 20th century when Henry Ford introduced lean mass production. Manufacturing superiority was directly responsible for Allied victory in the Second World War, with the U.S. outproducing all other belligerents put together. This makes loss of manufacturing capability very dangerous to the affluence and geopolitical status of the United States, and even detrimental to the profitability of the supply chains that hoped to reduce labor costs through offshoring.
The good news is however that there is no need to invent new methods, or even new technologies, to reverse this dangerous trend and regain high-wage jobs for workers side by side with higher profits for investors and lower prices for customers. We need rely only on the methods and principles that American industrialists, of whom Henry Ford was the foremost, used with enormous success more than 100 years ago. This webinar will teach these easily understood principles, and provide real-world examples to illustrate their effectiveness. Solutions that hid previously in plain view become obvious once we know what to look for.
Areas Covered in the Webinar:
- Manufacturing is the foundation of national prosperity and also military power. A decline in manufacturing capability is a universal leading indicator of a decline in national well-being and influence.
The coronavirus outbreak underscored the vulnerability of complex international supply chains.
- Manufacturing began to supersede agriculture as the world's principal source of wealth 500 or more years ago. The United Kingdom and the Netherlands surpassed Spain and Portugal, despite the latter's discovery of treasure in the New World, for exactly this reason.
- The exchange of raw materials for manufactured goods is characteristic of the relationship between colonies and their home countries. This condition was a major cause of the War of Independence. Similar disparities between the Northern and Southern United States was a principal cause of the Civil War even while industrialization made possible the abolition of slavery throughout the advanced world.
- China is now importing raw materials from the United States and selling us manufactured goods.
The issue of cheap offshore labor was identified and addressed by American industrialists more than 100 years ago.
- The Chinese government has threatened openly to disrupt supply chains intentionally by withholding exports of rare earths and even lifesaving medications . There is also the issue of reliance on China for semiconductor and other products that go into U.S. military equipment .
- Force majeure such as COVID-19 also can disrupt supply chains. IATF 16949:2016 clause 126.96.36.199 (c), Contingency plans, requires planning for continuity of supply in the event of force majeure such as natural disasters or labor shortages.
The removal of inefficiencies from jobs is just a first step, albeit one that many organizations have not taken; hence their purported need to go offshore for cheap labor. Opportunity costs, or the money we don't make by failing to adopt new and better methods, can easily represent 1000% or more of an activity's value. Opportunity costs are however invisible to the cost accounting system because we cannot deduct them on tax returns.
- Harrington Emerson (1911) added that issues included not only cheap offshore labor but also superior Japanese organizational principles, as adopted in turn from Prussia's military systems. "…the industrial organization of Japan, as much superior in principle to ours as were her army and navy to those of Russia, began to make us cry out in cowardly fear." Japan did not yet have the Toyota production system but we were sufficiently afraid of whatever it was it had to figure out how to match or exceed it, which Emerson and his contemporaries such as Henry Ford and Thomas Edison did. Japan later adopted Ford's system as the Toyota production system, and improved on it.
- The American industrialists addressed this issue with the recognition that most jobs contain enormous amounts of built-in waste whose removal allows the payment of higher wages, side by side with higher profits and lower prices. Frank Gilbreth proved that brick laying, as practiced for centuries, wastes about 64% of the worker's labor.
The United States gained manufacturing supremacy twice, and we can and must do it again.
- Henry Ford explained (My Life and Work, 1922), "If a device would save in time just 10 per cent. or increase results 10 per cent., then its absence is always a 10 per cent. tax."
- A Japanese company, however, increased its production of protective gowns (for use in the context of COVID-19) 100-fold, and mostly with items purchased from a 100-yen ($1 dollar) store.
- Farmers who cannot afford power equipment have adopted extremely simple tools to increase productivity enormously.
- Ford's industries gave us industrial supremacy by 1918.
- American manufacturing pulled us out of the Great Depression and then defeated the Axis by 1945.
- The same goal should be achievable by 2025 if not sooner. No new technology is needed, and neither are costly capital investments; we can usually achieve superior results by using what we have more effectively as shown above.
Who Will Benefit:
- All people with responsibility for strategic decision-making including supply chain
- From and manufacturing companies and agriculture
Principal Consultant, Levinson Productivity Systems
William A. Levinson, P.E., is the principal of Levinson Productivity Systems, P.C. He is an ASQ Fellow, Certified Quality Engineer, Quality Auditor, Quality Manager, Reliability Engineer, and Six Sigma Black Belt. He is also the author of several books on quality, productivity, and management.